The Kerala government on Monday announced an increase in the support price of natural rubber from ₹200 to ₹250 per kg under the Rubber Production Incentive Scheme, according to a statement from the Chief Minister's Office (CMO). The ₹50 hike, effective from July 3, 2026, fulfills a key budget promise and is aimed at providing relief to rubber farmers amid rising production costs.
Support Price Hike Details
| Item | Details |
|---|---|
| Previous support price | ₹200 per kg |
| New support price | ₹250 per kg |
| Increase | ₹50 per kg |
| Effective date | July 3, 2026 |
| Scheme | Rubber Production Incentive Scheme |
| Announced by | Chief Minister V D Satheesan |
The enhanced support price was announced by Chief Minister V D Satheesan in the state Budget, citing the need to support rubber growers amid rising production costs, the CMO statement said. Farmers, rubber producers' organisations and public representatives had been demanding an increase in the support price in view of the sharp rise in cultivation expenses.
Reasons for the Price Increase
According to the CMO statement, the government decided to raise the support price by ₹50 per kg — from ₹200 to ₹250 — following persistent demands from stakeholders. The decision reflects the government's recognition of the financial strain on rubber farmers due to escalating input costs such as labour, fertiliser, and tapping expenses.
Implications for Stakeholders
For rubber farmers in Kerala, India's largest natural rubber producing state, the new support price provides a minimum price floor, ensuring farmers receive at least ₹250 per kg for their produce under the incentive scheme. This is expected to improve farmer incomes and incentivise continued tapping, potentially boosting domestic production.
For commodity traders and procurement teams, the support price signals government intent to stabilise the domestic market. While the scheme applies only to rubber sold through designated channels, it may influence spot market prices in Kerala. The effective date of July 3, 2026, means all bills from that date are eligible for the higher support.
Market Context and Outlook
The announcement comes at a time when global natural rubber prices have been volatile. However, the support price is a domestic policy instrument and does not directly affect international benchmarks such as TSR20 or RSS3. Market participants will watch for any changes in global supply-demand dynamics, particularly from top producers Thailand, Indonesia, and Vietnam.
The Kerala government's move reinforces its commitment to the rubber sector. No further policy changes have been detailed, but the budget promise fulfilment may build farmer confidence. The next key data point for the natural rubber market will be the release of domestic production estimates for the 2026-27 season.
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